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TMI Blog2017 (7) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... ts liability and the filing of revised return was not bona fide without appreciating that the revised return filed by the assessee was valid and the same should have been considered while determining the income of the assessee. 2] The learned CIT(A) erred in holding that - a. That by filing a revised return, the assessee was adopting a colourable devise to postpone its tax liability. b. The reversal of sale consideration and the write off of the amount receivable from Milestone Developers was not a bona fide transaction and the sole intention was to postpone the tax liability of the assessee. c. There was no omission or wrong statement in the original return filed by the assessee and therefore, the revised return filed was invalid in law. 3] The learned CIT(A) erred in not appreciating that the assessee had filed the revised return within the time prescribed u/s 139(5) and therefore, there was no reason to reject the valid revised return filed by the assessee. 4] The learned CIT(A) failed to appreciate that - a. The agreement for sale of office premises to Cerebrum IT Park Ltd. had got cancelled and hence, the revenue from the said agreement had not accrued to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to various parties including sister concerns totaling to Rs.164,94,97,755/- and hence, the interest attributable to such advances was not allowable as a business deduction in this year. 6.2] The learned CIT(A) failed to appreciate that the said interest free amounts were advanced by the assessee to various parties including sister concerns for the purposes of business and hence, the learned CIT(A) was not justified in disallowing the interest. 6.3] The learned CIT(A) further erred in not appreciating that the assessee had sufficient interest free funds available with it which were more than the amount of interest free advances made by the assessee and accordingly, there was no reason to make any disallowance of interest. 4. The Revenue in ITA No.1291/PUN/2013 has raised the following grounds of appeal:- 1. The order of the Commissioner of Income-tax(Appeals) is contrary to law and to the facts and circumstances of the case. 2. The Commissioner of Income-tax (Appeals) erred in allowing the claim of deduction u/s 80IA(4) as the conditions of IPS-2008 were not fulfilled by the assessee. The assessee's project was not notified by the Govt. for claim of deduction u/s 80IA( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as on the year ending were at Rs.256.83 crores and the total interest outgo of the assessee at Rs.36.22 crores. The advances made to the group concern amounted to Rs.11,89,32,883/- Further, amount was advanced to Kumar Urban Development Limited at Rs.77,87,13,339/- and share application pending allotment in two companies i.e. Pune Mumbai Reality Pvt. Ltd. and River View Properties Limited amounted to Rs.86,86,50,600/-. The Assessing Officer was of the view that interest expenditure claimed was not allowable expenditure under section 36(1)(iii) of the Act as the interest bearing funds had not been expended wholly and exclusively for the purpose of business. The assessee had claimed the interest expenditure at Rs.36.22 crores and the average rate of interest expenditure was 10.16%. Accordingly, sum of Rs.18,63,36,188/- was disallowed under section 36(1)(iii) of the Act. 7. The CIT(A) allowed the claim of assessee under section 80IA(4)(iii) of the Act and also under section 80IB(10) of the Act in respect of Kumar Puram project. However, the CIT(A) upheld the disallowance made under section 36(1)(iii) of the Act. 8. The assessee is in appeal against the said disallowance made under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished by the assessee and no business expediency has been shown. The ld. AR of the assessee has contended that the assessee is having own interest free funds sufficient to cover the investments as per the balance sheet as on 31-03-2008. However, it is not evident from the records as to whether the assessee was having sufficient own interest free funds for making investment at the time of giving advances. The authorities below have not verified this fact which is material for adjudicating the issue. Thus, in view of the absence of vital information, we are of the considered view that this issue needs a revisit to the file of Assessing Officer to ascertain the financial position of the assessee at the time of giving advances. In case own interest free funds of the assessee are sufficient to cover the advances at the time of making such advances, no disallowance should be made in view of the decision of Hon'ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Reliance Power Utility Ltd. (supra). Accordingly, ground No. 3 raised in the appeal of the assessee for assessment year 2007-08 is allowed for statistical purpose." 10. The issue arising in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 09-07-2010. After notification of the project under IPS 2008, the eligibility of deduction has to be seen with respect to the new scheme. Thus, in view of the facts of the case and the observations of the Co-ordinate Bench of the Tribunal we find no merit in the contentions of the ld. DR that the assessee is not eligible to claim deduction u/s. 80IA(4)(iii) in assessment years under appeal." 12. Further, second objection of the Revenue of not establishing 30 units was also considered by the Tribunal in assessee's own case and following the ratio laid down by the Tribunal in M/s. Kolte Patil Developers Ltd. Vs. DCIT (supra) vide para 6.7 reference was made to the said decision at pages 22 to 25 of the order and held as under:- "... The order of the Tribunal in the case of M/s. Kolte Patil Developers Ltd. Vs. Dy. Commissioner of Income Tax (supra) further strengthens the case of assessee in allowing the deduction u/s. 80IA(4)(iii) of the Act. Accordingly, the ground of appeal raised by Department against allowing deduction u/s. 80IA(4)(iii) to the assessee is dismissed." 13. We are making reliance on the said decision of Tribunal in assessee's own case but for the sake of bre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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